Correlation Between CARGOJET INC and Yellow Pages

Can any of the company-specific risk be diversified away by investing in both CARGOJET INC and Yellow Pages at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining CARGOJET INC and Yellow Pages into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CARGOJET INC VAR and Yellow Pages Limited, you can compare the effects of market volatilities on CARGOJET INC and Yellow Pages and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in CARGOJET INC with a short position of Yellow Pages. Check out your portfolio center. Please also check ongoing floating volatility patterns of CARGOJET INC and Yellow Pages.

Diversification Opportunities for CARGOJET INC and Yellow Pages

-0.05

Correlation Coefficient

CARGOJET INC  Yellow Pages

Good diversification

The 3 months correlation between CARGOJET and Yellow is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding CARGOJET INC VAR and Yellow Pages Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yellow Pages Limited and CARGOJET INC is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on CARGOJET INC VAR are associated (or correlated) with Yellow Pages. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yellow Pages Limited has no effect on the direction of CARGOJET INC i.e., CARGOJET INC and Yellow Pages go up and down completely randomly.

Pair Corralation between CARGOJET INC and Yellow Pages

Assuming the 90 days trading horizon CARGOJET INC VAR is expected to under-perform the Yellow Pages. In addition to that, CARGOJET INC is 1.18 times more volatile than Yellow Pages Limited. It trades about -0.14 of its total potential returns per unit of risk. Yellow Pages Limited is currently generating about -0.03 per unit of volatility. If you would invest  753.00  in Yellow Pages Limited on December 4, 2024 and sell it today you would lose (33.00) from holding Yellow Pages Limited or give up 4.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

CARGOJET INC VAR  vs.  Yellow Pages Limited

CARGOJET INC VAR

Risk-Adjusted Performance

Very Weak

Over the last 90 days CARGOJET INC VAR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Yellow Pages Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Yellow Pages Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Yellow Pages is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with CARGOJET INC and Yellow Pages

The main advantage of trading using opposite CARGOJET INC and Yellow Pages positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CARGOJET INC position performs unexpectedly, Yellow Pages can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Yellow Pages will offset losses from the drop in Yellow Pages' long position.

The idea behind CARGOJET INC VAR and Yellow Pages Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.